Uncertainty Over Tax Breaks May Hit Muni Bond ETFs | ETF Trends

Exchange traded funds that invest in municipal bonds have been steady so far this week following the Obama administration’s proposals to limit tax breaks on muni bonds for wealthy investors.

In the proposed 2013 budget, the administration is seeking to limit tax breaks some individuals can receive on municipal securities and to revive the Build America Bonds program, Bloomberg reports.

The change could radically alter the $3.7 trillion market if approved, according to Reuters.

Obama reiterated his aim to reduce tax breaks for families earning over $250,000 to 28% from 35%.